My basic point is, the law is the law. You may not like it, but you can't wish it away.
After reading this thread for far too long I've come to the conclusion that the lake owner is a jerk, the home owners are jerks, but property is property.
If there is not a law against his fence, then he has every right to put one up.
There is no way the government will step in and force him to sell the lake. There is no "public interest" other than the property values of a small number of home owners. They really haven't lost any actual value, they never really had it to begin with.
Their best solution would be to form a corporation with the sole purpose of buying him out. Get 100% compliance will all the homeowners affected and offer him, say $10,000 total. Make it clear that you will pay no more than that. Make certain that the tax accessor understands that you do not have lake front property and that he does. If he doesn't agree quick, taxes will eat into his profit from the $10,000 offer.
If he stands firm, he will have an expensive piece of useless property.
My basic point is, the law is the law. You may not like it, but you can't wish it away.
I agree with your whole post, and I too, stayed with the thread a lot longer than I normally would have. I figured eventually someone would be able to clear up the privacy fence versus a neighbors deck 'issue'. And you did!! lol